Earnings per share including discontinued operations amounted to SEK -0.30 (0.61) before dilution and ‑0.29 (0.60) after dilution

The Board of Directors proposes that no dividend be paid for the financial year 2018

SEK million

2019 Jan-Mar

2018Jan-Mar

Δ

Net sales

639.8

716.1

-11%

Gross profit

161.5

135.3

19%

Gross margin, %

25.2

18.9

6.3 P/E

Operating income before depreciation and amortization

-13.2

-42.7

Operating margin before depreciation and amortization, %

-2.1

-6.0

3.9 P/E

Operating income

-33.5

-58.8

Operating margin, %

-5.2

-8.2

2.9 P/E

[1]HSNG is recognized as a discontinued operation in the consolidated accounts.

ALL COMPANIES IMPROVED EARNINGS

In the first quarter, Qliro Financial Services successfully recruited new merchants, CDON Marketplace increased sales for external merchants and Nelly showed strong growth in net sales. We have also greatly increased Qliro Financial Services’ loan book, further improved the efficiency in CDON Marketplace and digitalized Nelly’s returns process. All three companies improved their operating result and strengthened their market positions during the quarter. Also, our strategic efforts to establish three independent subsidiaries continues according to plan.

Three independent companies Since June 2018, Qliro Group’s strategy has been to run Qliro Financial Services, CDON Marketplace and Nelly as three independent companies. This creates the best conditions for the companies to succeed, thereby increasing shareholder value. Group management is focusing on getting the companies ready for listing while evaluating potential transactions. Work is underway to separate the companies’ IT and accounting systems and they should be operationally and structurally independent in the first half of 2019 and ready for listing in the second half.

Qliro Financial Services’ operating profit improved sharply Qliro Financial Services’ loan book grew by 49 percent to more than SEK 1.5 billion with the fastest growth in personal loans. Total operating income increased by 26 percent while total operating expenses increased by 17 percent, manifesting the scalability of the business model. Operating income before depreciation, amortization and impairment improved by 295 percent to SEK 14 million.

Qliro Financial Services’ commercial initiatives are effective and during the quarter the company entered partnerships with several merchants such as Eleven, Nordicfeel, Baresso, Best of Brands, Dollarstore, inkClub.com, dammsugarpåsar.nu, dinVitamin.com and others. Qliro Financial Services is well positioned to continue to benefit from the underlying market growth of e-commerce.

CDON Marketplace increased sales for external merchants and gross profit External merchants’ sales on CDON Marketplace increased by 36 percent, and we see a continued strong trend in the second quarter. Commission revenue increased by 32 percent, which helped boost gross profit by 11 percent to SEK 44 million. At the same time, salary costs decreased significantly as the company benefits from its IT platform and increased automation. Operating income before depreciation, amortization and impairment amounted to SEK -7 (-21) million in the seasonally weak first quarter.

CDON Marketplace is accelerating its transition to the marketplace model that is more capital efficient, scalable and profitable.

Nelly increased sales and gross profit Nelly’s sales increased by 10 percent, the number of customers by 7 percent and the average shopping basket by 11 percent. Gross profit increased by 19 percent to SEK 69 million. Operating income before depreciation, amortization and impairment improved to SEK -7 (-15) million in the seasonally weak first quarter.

Nelly digitalized its returns process during the quarter and successfully launched its own brand via Zalando throughout Europe, with most sales in markets that complement Nelly’s own range. The company continues to develop its NLYbyNelly brand and benefits from successful customer recruitment and strong customer loyalty.

Financial flexibility Qliro Group has a strong financial position and during the quarter we lowered our debt by repaying the SEK 250 million bond loan. Qliro Financial Services has several sources for future funding and net cash in the e‑commerce business totalled SEK 205 million. Our companies have strong positions and are driving forces in e‑commerce and related financial services in the Nordics.

Marcus Lindqvist President and CEO, Stockholm, 17 April 2019

SIGNIFICANT EVENTS DURING AND AFTER THE FIRST QUARTER

Qliro Group called for early redemption of bonds On February 4, it was announced that Qliro Group would redeem all outstanding bonds, which happened in the end of February.

Conference callAnalysts, investors and the media are invited to a conference call today at 10 a.m. To participate in the conference call, please dial: Sweden: 08 5033 6573 UK: +44 330 336 9104 US: +1 929 477 0630 The pin code to access this call is 317405. The presentation material and webcast will be published at www.qlirogroup.com.

About Qliro GroupQliro Group is a leading Nordic e-commerce group in consumer goods and related financial services. Qliro Group operates CDON.COM, the leading Nordic online marketplace, the fashion brand Nelly and Qliro Financial Services, offering financial services to merchants and consumers. In 2018 the Group had sales of SEK 3.2 billion. Qliro Group’s shares are listed on the Nasdaq Stockholm MidCap segment under the ticker symbol QLRO.

This information is information that Qliro Group AB is required to disclose under the EU Market Abuse Regulation. The information was released for publication through the agency of the above-mentioned contacts at 8:00 a.m. CET on April 17, 2019.